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2 What is the Air Resources Board? The state agency charged with: Coordinating efforts to attain and maintain ambient air quality standards Conducting research into the causes of, and solution to, air pollution Monitoring and regulating the sources, and reducing the emissions of gases, that cause climate change (Adapted in part from Section of the Health and Safety Code. )

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3 What is the Air Resources Board? (cont.) The Mission: To promote and protect public health and ecological resources through the reduction of air pollutants while recognizing and considering the effects on the economy of the state. The Goals : Provide Safe, Clean Air to All Californians Protect the Public from Exposure to Toxic Air Contaminants Reduce California's Emission of Greenhouse Gases Base Decisions on Best Possible Scientific and Economic Information Provide Quality Customer Service to All ARB Clients

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16 Regulation Provides a Safety Exemption Safety exemption applies if –The Master determines that compliance would endanger the safety of the vessel, crew, cargo, or passengers –Due to severe weather conditions, equipment failure, fuel contamination, or other extraordinary reasons beyond the Masters reasonable control Safety exemption applies only as long and to the extent necessary to secure safety –Master takes all reasonable precautions after the incident to avoid or minimize repeated claims of exemption –Master notifies ARB of a safety exemption claim within 24 hours and submits documentation to establish conditions within four working days after incident ends

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17 Regulation Provides an Essential Modifications Exemption This provision is granted when vessel operators/owners demonstrate that they cannot meet the fuel requirements without essential modifications to the vessel –Regulation provides a definition of an Essential Modification –Exemption is granted by ARB based on a demonstration of need –Vessels must meet operational requirements of exemption

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21 * Summary from July 1, 2009 to October 31, 2013 Use of Provisions in Regulation Facilitates Implementation Safety exemption used 88 times Noncompliance fees paid 5 times Essential Modifications Exemptions –majority of applications are for auxiliary boilers –438 exemptions provided for vessels that demonstrated the need for essential modifications

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22 Outreach Efforts to Support Implementation Six advisories issued –Five in 2011 –One in 2012 –Advisories are used to update and clarify regulatory language and changes thereof –Many also include forms and maps –Info can be found at arb.ca.gov/marine

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Amendments

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Amendments Extension of Regulated California Waters in Southern California Advantages of the revised implementation date of 0.1% sulfur fuel to January 1, 2014 Changes to the Noncompliance Fee Provision

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25 Extended Clean Fuel Zone

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26 Facilitates continued high compliance rate and a successful transition to 0.1% fuels –Provided industry with additional lead time between implementation of ECA Phase 1 (1% to ~200 nm) and ARBs Phase 2 (0.1%) –Lessened any near term, port specific availability issues with 0.1% fuel –Provided shippers more flexibility in purchasing higher viscosity compliant distillate –Provides additional time for fuels meeting the new ISO 8217 fuel specification to penetrate the market Advantages of Delaying Phase 2

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27 Fee halved when a vessel purchases and uses compliant fuel during noncompliant California port visit Fee for second noncompliant port visit reduced from $91,000 to $45,500 (same as for first port visit) Anchorage conducted in conjunction with a port visit not counted as a second port visit Changes to Noncompliance Fee Provision